Dividend Aristocrats In Focus Part 11: Ecolab Inc. (ECL)

Ecolab Inc. (NYSE:ECL) is the largest publicly traded company in the cleaning products industry. Ecolab’s vision is guided by four key principles, which are:

1. Clean water

2. Safe food

3. Abundant energy

4. Healthy environments

Abiding by these core principles has built very successful relationships with its customers.

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Ecolab traces its beginnings to 1923, when Merritt J. Osborn invented a new cleaning product called Absorbit. This product was revolutionary for its time. It cleaned carpets without the need for hotels to shut down to perform carpet cleaning. The product held so much promise that Osborn built an entire company around it. He called the company Economics Laboratory.

Over time, the company developed a wide range of other products and also entered cleaning services. Today, Ecolab generates annual sales in excess of $13 billion and employs 47,000 associates. The company has increased its dividend payments every year since 1985 (3).

Ecolab’s long dividend history makes it a member of the exclusive Dividend Aristocrats Index. To be a Dividend Aristocrat, a stock must have at least 25 consecutive years of dividend increases. Dividend Aristocrats tend to be the ‘best of the best’ in their industry. You can see all 50 Dividend Aristocrats here.

Ecolab has done more than just increase dividends over the last decade… It has also delivered strong total returns, as the image below shows.

Keep reading this article to learn more about the investment prospects of Ecolab.

Business Overview

Ecolab operates three major business segments:

– Global Industrial

– Global Institutional

– Global Energy

Each business is roughly of equal size. The Global Industrial group provides water treatment, cleaning, and sanitation products and services, primarily to large industrial firms. These customers are typically within the food and beverage, manufacturing, chemical, and mining industries.

The Global Institutional business provides specialized cleaning and sanitation products to the foodservice, hospitality, lodging, healthcare, and retail industries. Ecolab’s products are used for on premise laundry, housekeeping, and general food safety purposes.

The Global Energy segment is centered on the Nalco brand. This division provides chemical and water treatment services to the petroleum and petrochemical industries. Ecolab’s Global Energy business is split into upstream oilfield services and downstream refining services.

The company is also diversified geographically. Approximately 43% of its annual sales come from outside North America.

Source: 2015 Annual Report, page 2